The DCIT, Central Circle-2, Visakhapatnam v. Sri Moturi Kanakeswara Rao, Eluru

ITA 67/VIZ/2011 | 2002-2003
Pronouncement Date: 28-09-2011 | Result: Allowed

Appeal Details

RSA Number 6725314 RSA 2011
Assessee PAN ADIPM1465E
Bench Visakhapatnam
Appeal Number ITA 67/VIZ/2011
Duration Of Justice 7 month(s) 4 day(s)
Appellant The DCIT, Central Circle-2, Visakhapatnam
Respondent Sri Moturi Kanakeswara Rao, Eluru
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 28-09-2011
Assessment Year 2002-2003
Appeal Filed On 23-02-2011
Judgment Text
ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NOS.67 TO 72/VIZAG/2011 ASSESSMENT YEARS:2002-03 TO 2007-08 DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 VISAKHAPATNAM VS. MOTURI KANAKESWARA RAO ELURU (APPELLANT) (RESPONDENT) PAN NO:ADIPM 1465 E ITA NOS.136 TO 141/VIZAG/2011 ASSESSMENT YEARS:2002-03 TO 2007-08 MOTURI KANAKESWARA RAO ELURU VS. DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 VISAKHAPATNAM (APPELLANT) PAN NO:ADIPM 1465 E (RESPONDENT) PAN NO:ADIPM 1465 E DEPARTMENT BY: SHRI TH. LUCAS PETER CIT (DR) ASSESSEE BY: SHRI Y. SURYA CHANDRA RAO CA DATE OF HEARING: 28/07/2011 DATE OF PRONOUNCEMENT: 28/09/2011 ORDER PER BENCH: THESE CROSS APPEALS ARE DIRECTED AGAINST THE COMMON ORDER DATED 29.11.2010 PASSED BY LEARNED CIT(A)-I HYDERABAD AND THEY RELATE TO THE ASSESSMENT YEARS 2002-03 TO 2007-08. SINCE THE ISSU ES URGED IN ALL THESE APPEALS ARE IDENTICAL IN NATURE THEY WERE HEARD TO GETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. THE ASSESSING OFFICER ENHANCED THE INCOME DISCLO SED BY THE ASSESSEE FROM REARING AND TRADING OF FISH IN ALL TH ESE YEARS. IN THE APPEALS FILED BY THE ASSESSEE THE LEARNED CIT (A) GAVE PAR TIAL RELIEF BY FOLLOWING HIS ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 2 OF 9 ORDERS PASSED IN THE HANDS OF ANOTHER ASSESSEE NAME D SHRI NUKALA RAMAKRISHNA WHO WAS ALSO ENGAGED IN REARING AND TR ADING OF FISH. STILL AGGRIEVED THE ASSESSEE IS IN APPEALS BEFORE US WIT H THE FOLLOWING GROUNDS: (A) THE HON'BLE CIT (APPEALS) A.P-1 HYDERABAD OU GHT TO HAVE CONSIDERED THE ESTIMATION OF THE APPELLANT WHICH IS REASONABLE FROM ALL ASPECTS. (B) THE HON'BLE CIT (APPEALS) OUGHT TO HAVE CONSI DERED THE COMPARABLE CASES WHICH WERE FILED BY THE ASSESSEE. (C) THE HON'BLE CIT (APPEALS) OUGHT NOT TO HAVE CONSIDERED THE CASE OF SRI NUKALA RAMAKRISHNA FOR ANY COMPARISON P URPOSE. (D) ANY OTHER GROUNDS MAY BE URGED AT THE TIME OF HEARING. THE REVENUE IS ALSO IN APPEALS BEFORE US ASSAILING THE RELIEF GRANTED BY LEARNED CIT(A). 3. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REARING AND TRADING OF F ISH. THE ASSESSEE WAS REARING FISHES IN THE OWN TANKS AND ALSO IN TANKS T AKEN ON LEASE. THE DEPARTMENT CARRIED OUT A SEARCH & SEIZURE OPERATION UNDER SECTION 132 OF THE ACT IN THE HANDS OF THE ASSESSEE DURING THE CO URSE OF WHICH IT WAS NOTICED THAT THE ASSESSEE HAS NOT DISCLOSED THE INC OME FROM REARING AND TRADING OF FISH DURING THE YEARS UNDER CONSIDERATIO N. IN RESPONSE TO THE NOTICES ISSUED UNDER SECTION 153A OF THE ACT IN PUR SUANCE OF THE SEARCH PROCEEDINGS THE ASSESSEE FILED RETURNS OF INCOME D ECLARING THE INCOME FROM REARING AND TRADING OF FISH ON ESTIMATED BASIS. HOW EVER THE ASSESSING OFFICER ENHANCED THE SAME BY FOLLOWING THE METHODOL OGY ADOPTED FOR ESTIMATION OF THE SAID INCOME IN THE HANDS OF SHRI NUKALA RAMA KRISHNA ANOTHER ASSESSEE CITED (SUPRA). ACCORDINGLY THE AS SESSING OFFICER ASSESSED THE DIFFERENCE IN THE SAID INCOME IN THE HANDS OF T HE ASSESSEE IN ALL THE YEARS UNDER CONSIDERATION. IN THE APPEALS FILED BY T HE ASSESSEE THE LEARNED CIT (A) DIRECTED THE ASSESSING OFFICER TO ESTIMATE THE INCOME FROM THIS ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 3 OF 9 BUSINESS IN ACCORDANCE WITH THE DIRECTIONS GIVEN BY HIM IN THE HANDS OF SHRI NUKALA RAMA KRISHNA. 4. THE RELEVANT OBSERVATIONS MADE IN THE ORDER OF L EARNED CIT (A) PASSED IN THE HANDS OF THE ASSESSEE HEREIN ARE EXTR ACTED BELOW: 07.0 I HAVE GONE THROUGH THE FACT OF THE CASE AND T HE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROU GH THE CASE OF NUKALA RAMAKRISHNA WHICH HAS BEEN RELIED UP ON BY THE ASSESSING OFFICER WHILE ESTIMATING THE INCOME O F THE APPELLANT. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DOES NOT DISPUTE THAT THE ASSESSEE APART FROM CULTIVATIO N OF FISH IN HIS OWN TANKS AND LEASED TANKS IS ENGAGED IN TRADIN G OF FISH CULTIVATED BY HIM. THUS THE BUSINESS ACTIVITY BOTH IN THE CASE OF THE APPELLANT AND NUKALA RAMAKRISHNA ARE IDENTIC AL. I FIND FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICE R WHILE COMPUTING THE INCOME HAS TOTALLY RELIED ON THE ASS ESSMENT MADE IN THE CASE OF SRI NUKALA RAMAKRISHNA. EVEN TH E COMPUTATION OF INCOME MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS BASED ON THE SAME RATE WHICH IS ADOPTED IN THE CASE OF NUKALA RAMAKRISHNA EXCEPT FOR THE AC REAGE OF LAND. EVENTUALLY THE ASSESSMENT ORDERS PASSED IN T HE CASE OF SRI NUKALA RAMAKRISHNA WERE ALSO SUBJECTED TO APPEA L AND THE SAME HAS BEEN DECIDED BY ME IN ITA NO.0564 TO 0569/CC-2 VIZAG/CIT(A)-I/09-10 DATED 29.11.2010. W HILE DECIDING THE ISSUE OF INCOME/PROFIT FROM OWN TANKS/ LEASE TANKS I HAD GIVEN CERTAIN DIRECTION TO THE ASSESSIN G OFFICER FOR COMPUTATION OF THE PROFIT WHICH IS SUMMARIZED B ELOW: A) AS REGARDS YIELD OF FISH I HAVE DIRECTED THE ASSESS ING OFFICER TO CONSIDER THE YIELD OF FISH PER ACRE WOUL D BE 3 TONNES. HOWEVER THE YIELD SHOULD BE IN RESPECT OF WATER-SPREAD AND NOT ENTIRE LAND. B) WHILE WORKING OUT THE TOTAL WATER-SPREAD USED FOR F ISH CULTIVATION THE ASSESSING OFFICER IS DIRECTED TO A LLOW 20% REDUCTION FROM THE TOTAL LAND USED FOR FISH CULTIVATION WHICH IS IN LINE WITH THE CIRCULAR OF C BDT. C) THE ASSESSING OFFICER IS DIRECTED TO COMPUTE ONLY O NE PROFIT SINCE THE BUSINESS OF THE APPELLANT AS DISCU SSED ABOVE IS ONE INTEGRATED ACTIVITY OF REARING AND SEL LING THE FISH. ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 4 OF 9 D) THE PROFIT PER ACRE FOR FINANCIAL YEAR 2007-08 HAD BEEN WORKED OUT AT RS.41 814/-. FOR THE FINANCIAL YEARS 2006-07 AND FOR THE PRECEDING YEARS UPTO FINANCIAL YEAR 2001-02 THE ASSESSING OFFICER WAS DIRECTED TO REDUCE PROFIT PER ACRE BY 10% FOR EACH YEAR. FOR EXAMPLE THE PROFIT PER ACRE FOR 2006-07 WILL BE RS.37 663/- (41814-4181) FOR THE FINANCIAL YEAR 20 05- 06 IT WILL BE 33 869 (37633-3763) AND SO ON. THIS W AY THE PROFIT FOR THE FINANCIAL YEAR 2001-02 PER ACRE WILL COME TO RS.22 221. THIS PROFIT IS IN RESPECT OF THE OWN TANK. AS REGARD THE LEASED TANKS THE ASSESSING OFF ICER SHOULD DEDUCT THE LEASED RENTAL ON ACTUAL FOR EACH YEAR AS MENTIONED IN THE ASSESSMENT ORDER. 07.1 THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE ABOVE PARAMETERS WHILE COMPUTING THE INCOME IN THE CASE O F THE APPELLANT. HOWEVER I MAY MENTION THAT IN THE ASSES SMENT ORDER IN THE CASE OF THE APPELLANT THE ASSESSING O FFICER HAS CONSIDERED LEASE RENTAL VARYING FROM RS.13 000 TO R S.20 000 FOR DIFFERENT ASSESSMENT YEARS. THE SAME HAS BEEN A DOPTED BASED ON THE ASSESSMENT MADE IN THE CASE OF NUKALA RAMAKRISHNA. I MAY OBSERVE THAT IN THE CASE OF NUKAL A RAMAKRISHNA SPECIFIC SEIZED MATERIAL WAS FOUND REG ARDING LEASE RENTAL. ON THE OTHER HAND THE APPELLANT CLAI MS THAT THERE WAS NO SEIZED MATERIAL IN HIS CASE. THE APPEL LANT HAD CLAIMED LEASE RENTAL OF RS.12 000/- PER ACRE WHICH IS LESS THAN THE AMOUNT ALLOWED BY THE ASSESSING OFFICER. IF THER E IS NO SEIZED MATERIAL RELATING TO THE LEASE RENTAL IN THE CASE OF THE APPELLANT THEN THE ASSESSING OFFICER SHOULD ALLOW R S.12 000/- PER ACRE AS CLAIMED BY HIM. I HAVE ALSO DIRECTED IN THE APPELLATE ORDER IN THE CASE OF NUKALA RAMAKRISHNA T HAT ANY ADDITIONAL INCOME OFFERED BY THE APPELLANT UNRELATE D TO INCOME FROM OWN/LEASED TANK SHOULD ALSO BE ADDED TO THE PROFIT COMPUTED IN THE MANNER DIRECTED IN THE APPEL LATE ORDER. THE SAME SHOULD ALSO BE FOLLOWED IN THE CASE OF THE APPELLANT. IN SHORT THE ASSESSING OFFICER IS DIRECT ED TO RECOMPUTED THE INCOME BASED ON MY FINDING GIVEN IN THE APPELLATE ORDER IN THE CASE OF NUKALA RAMAKRISHNA I N ITA NOS.0564 TO 0569/CC-2 VIZAG/CIT(A)-I/09-10 DATED 29.11.2010 AND ALSO SUBJECT TO MY OBSERVATIONS GIVE N ABOVE. 5. SHRI NUKALA RAMAKRISHNA CITED ABOVE AND ALSO THE REVENUE FILED APPEALS BEFORE THE TRIBUNAL CHALLENGING THE ORDERS OF LEARNED CIT(A) WHICH ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 5 OF 9 WERE NUMBERED AS ITA NOS. 53 TO 58; 61 TO 66 & 158/ VIZAG/2011. IN THOSE CASES THE TRIBUNAL CONSIDERED THE FOLLOWING THREE ISSUES IN CONNECTION WITH THE ESTIMATION OF INCOME FROM FISH BUSINESS:- (A) FOR THE PURPOSE OF ESTIMATING INCOME FROM FISH BUSINESS WHETHER THE TOTAL AREA OF THE LAND IS TO BE CONSIDE RED OR ONLY THE AREA USED FOR TANK I.E. WATER SPREAD AREA. (B) FOR THE PURPOSE OF ESTIMATION OF INCOME WHET HER THE INFORMATION AVAILABLE IN THE SEIZED MATERIALS ARE T O BE TAKEN INTO ACCOUNT OR THE INFORMATION COLLECTED FROM DY. DIREC TOR OF FISHERIES ARE TO BE TAKEN INTO ACCOUNT. FURTHER WHETHER THE ASSE SSING OFFICER WAS RIGHT IN ESTIMATING THE INCOME IN TWO STAGES VIZ. PROFIT AT FARM GATE LEVEL AND PROFIT FROM TRADING. (C) WHETHER THE INCOME FROM FISH BUSINESS ESTIMATE D BY LEARNED CIT(A) IS APPROPRIATE OR NOT. 5.1 WITH REGARD TO THE FIRST QUESTION CITED ABO VE THE TRIBUNAL UPHELD THE ORDER OF LEARNED CIT(A) THAT THE INCOME FROM FISH B USINESS HAS TO BE ESTIMATED ON THE BASIS OF WATER SPREAD AREA ONLY SINCE PART OF LAND IS USED FOR TANK EMBANKMENTS AND ROADS.. ACCORDINGLY THE WATER SPREAD AREA WAS WORKED OUT BY LEARNED CIT(A) AT 80% OF THE TOTA L LAND AREA WHICH WAS ALSO UPHELD BY THE TRIBUNAL. THE RELEVANT OBSER VATIONS MADE BY THE TRIBUNAL IN THE CASE OF SHRI NUKALA RAMAKRISHNA CIT ED ABOVE ARE EXTRACTED BELOW:- 8..BEFORE THE LEARNED CIT (A) THE ASSESSEE CONT ENDED THAT THE EFFECTIVE UTILIZATION AREA COMMONLY CALLED WAT ER SPREAD AREA WILL BE IN THE RANGE OF 75% TO 80% OF THE TOTAL ARE A AND ACCORDINGLY THE INCOME HAS TO BE COMPUTED WITH REFE RENCE TO WATER SPREAD AREA ONLY. IN SUPPORT OF THIS CONTENTI ON THE ASSESSEE SUBMITTED A COPY OF CBDTS INSTRUCTION NO. 5160 DATED 19.10.1993 BEFORE LEARNED CIT(A) WHEREIN IT IS STA TED AS UNDER: TO PERSUADE THEM TO VOLUNTARILY COMPLY WITH THE INCOME-TAX LAW THE FINANCE MINISTRY HAS DECIDED TO ACCEPT THE INCOME RETURNED BY FISH FARMERS IF SUCH INCOME IS RS.4000/- PER ACRE OF WATER-SPREAD PER YEAR. THE WATER SPREAD MAY BE ESTIMATED AT 70% OF THE TOTAL LAND AREA. THE REMAINING 30% WILL REPRESENT THE AREA OCCUPIED BY THE TANK EMBANKMENTS. CONSEQUENTLY THE FISH FARMER WITH A ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 6 OF 9 WATER AREA OF 7.5 ACRES (I.E. TOTAL GROSS LAND AREA OF 10.7 ACRES) WILL BE BELOW THE TAX LIMIT. THE ASSESSEE HAS PLACED A COPY OF THE ABOVE SAID IN STRUCTION AT PAGE NO.286 OF PAPER BOOK (VOLUME 1) FILED BY HIM B EFORE US. ACCORDINGLY THE LEARNED CIT (A) ORDERED THAT THE TO TAL WATER SPREAD AREA SHOULD BE TAKEN AS 80% OF THE TOTAL LAN D AREA I.E. HE GAVE A REDUCTION OF 20% TOWARDS TANK EMBANKMENTS AND ROADS. THE ASSESSEE ALSO SUBMITTED THAT THERE ARE MISTAKES IN THE EXTENT OF OWN LANDS AND LEASED LANDS CONSIDERED BY THE ASSESSING OFFICER IN VARIOUS YEARS. HENCE THE LEAR NED CIT (A) SET ASIDE THE SAID ISSUE OF ARRIVING AT THE ACTUAL EXTE NT OF OWN TANKS AND LEASED TANKS TO THE FILE OF THE ASSESSING OFFIC ER WITH CERTAIN DIRECTIONS. BOTH THE PARTIES ARE NOT AGGRIEVED BY THE ISSUES DISCUSSED ABOVE IN THIS PARAGRAPH. IN ANY CASE THE CBDT ITSELF HAS RECOGNISED THAT THE WATER SPREAD AREA WILL BE L ESS THAN THE TOTAL AREA DUE TO TANK EMBANKMENTS ROADS ETC. BY 3 0%. IN THE INSTANT CASES ALSO THE LEARNED CIT(A) HAS DI RECTED THE ASSESSING OFFICER TO ALLOW A DEDUCTION OF 20% FROM THE TOTAL LAND AREA FOR THE PURPOSE OF ASCERTAINING WATER SPREAD AREA. CONSISTENT WI TH THE VIEW TAKEN IN THE ABOVE CITED CASE WE UPHOLD THE SAID ORDER OF LEARN ED CIT(A). 5.2 THE NEXT QUESTION RELATED TO THE SELECTION O F THE BASIS FOR ESTIMATION OF INCOME AND ALSO RELATED TO THE QUESTION VIZ. WH ETHER THE INCOME IS TO BE ESTIMATED IN TWO STAGES OR IN ONE STAGE. IN THE CAS E OF NUKALA RAMAKRISHNA THE ASSESSING OFFICER INITIALLY WORKED OUT THE PROFIT FROM FISH BUSINESS PER ACRE ON THE BASIS OF SEIZED MATERIALS. HOWEVER HE DECIDED NOT FOLLOW THE SAME FOR THE PURPOSE OF ESTIMATING O F INCOME FROM FISH BUSINESS. THE ASSESSING OFFICER ALSO OBTAINED INFOR MATION ABOUT THE PROBABLE INCOME FROM THE DY. DIRECTOR OF FISHERIES MACHILIPATNAM. THE SAID DY. DIRECTOR FURNISHED THE DETAILS OF PROBABLE INCO ME AT THE FARM GATE LEVEL. SINCE THE SAID ASSESSEE WAS ALSO ENGAGED IN TRADING OF FISHES THE ASSESSING OFFICER PROCEEDED TO ESTIMATE THE PROFIT IN TWO STA GES VIZ. FIRSTLY THE PROFIT AT THE FARM GATE LEVEL AS ESTIMATED BY THE DY. DIRE CTOR OF FISHERIES AND SECONDLY THE PROFIT THAT WOULD BE MADE ON TRADING AND AGGREGATED BOTH THE PROFITS FOR THE PURPOSE OF ESTIMATING THE INCOM E FROM FISH BUSINESS. ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 7 OF 9 HOWEVER IN THE APPEAL PROCEEDINGS THE LEARNED CIT (A) HELD THAT THE PROFIT SHOULD BE ESTIMATED ONLY AT ONE LEVEL I.E. AT THE TIME WHEN THE ACTUAL SALE OF FISHES TAKES PLACE. FURTHER THE LEARNED CIT(A) HELD THAT THE INFORMATION AVAILABLE IN THE SEIZED RECORDS SHOULD BE PREFERRED OVER THE ESTIMATE GIVEN BY DY. DIRECTOR OF FISHERIES. THE TRIBUNAL UPHELD THE SAID VIEWS OF LEARNED CIT(A) IN THE CASE OF NUKALA RAMAKRISHNA. IN THE I NSTANT CASES ALSO THE LEARNED CIT(A) HELD THAT THE PROFIT SHOULD BE ESTIM ATED AT ONLY ONE STAGE AS THE ASSESSEE IS CARRYING ON THE INTEGRATED ACTIV ITY OF REARING AND SELLING THE FISH. CONSISTENT WITH THE VIEW TAKEN IN THE CA SE OF NUKALA RAMAKRISHNA WE UPHOLD THE ORDER OF LEARNED CIT(A) ON THIS POINT ALSO. HOWEVER IN THE INSTANT CASE THE DEPARTMENT DID NOT SEIZE ANY RECO RD AS IN THE CASE OF SHRI NUKALA RAMAKRISHNA WHICH COULD THROW LIGHT ABOUT T HE COMPUTATION OF INCOME FROM FISH BUSINESS. 5.3 THE LAST QUESTION IS WHETHER THE INCOME EST IMATED BY LEARNED CIT(A) IS APPROPRIATE IN THE FACTS AND CIRCUMSTANCE S OF THE CASE. IN THE CASE OF SHRI NUKALA RAMAKRISHNA THE ASSESSING OFFI CER HAD ESTIMATED THE PROFIT PER ACRE OF LAND AT RS.46 460/- ON THE BASIS OF INFORMATION AVAILABLE IN THE SEIZED RECORDS AND ALSO ON THE BASIS OF INFO RMATION GIVEN BY THAT ASSESSEE IN HIS SWORN STATEMENT. THE SAID PROFIT W AS STATED TO HAVE BEEN WORKED OUT FOR THE FINANCIAL YEAR 2007-08. IT WAS N OTICED BY LEARNED CIT(A) THAT THE ASSESSING OFFICER DID NOT DEDUCT IN DIRECT EXPENSES WHILE WORKING OUT THE PROFIT. FURTHER THE ASSESSING OFFI CER DID NOT WORK OUT THE PROFIT FOR THE EARLIER YEARS. ACCORDINGLY THE LEAR NED CIT(A) GAVE CERTAIN DIRECTIONS TO MAKE GOOD THE DEFICIENCIES POINTED AB OVE IN THE CASE OF SHRI NUKALA RAMAKRISHNA. IN THE INSTANT CASES ALSO THE LEARNED CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO FOLLOW THE PARAME TERS FIXED BY HIM IN THE CASE OF NUKALA RAMAKRISHNA WHILE COMPUTING THE INCO ME FROM FISH BUSINESS WHICH WE ARE NOT ABLE TO AGREE FOR THE RE ASONS GIVEN IN THE SUCCEEDING PARAGRAPH. ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 8 OF 9 6 HOWEVER IN THE INSTANT CASE THE DEPARTMENT DID NOT SEIZE ANY RECORD WHICH COULD THROW LIGHT ON THE PROBABLE INCOME THAT COULD HAVE BEEN EARNED BY THE ASSESSEE HEREIN. WE HAVE NOTED IN TH E CASE OF SHRI NUKALA RAMAKRISHNA THAT THE PROFIT OF A BUSINESS ENTITY WO ULD DEPEND ON VARIOUS INTERNAL AND EXTERNAL FACTORS. HENCE IN OUR VIEW IT WOULD NOT BE CORRECT TO USE THE INFORMATION RELATING TO THE BUSINESS OF SHR I NUKALA RAMAKRISHNA FOR THE PURPOSE OF ESTIMATING THE INCOME OF THE ASSESSE E HEREIN. FOR EXAMPLE THE DISTINGUISHING FEATURE IN THE INSTANT CASE VIS- -VIS NUKALA RAMAKRISHNA IS THAT THERE IS HUGE DIFFERENCE IN THE SCALE OF OP ERATION BETWEEN BOTH THE ASSESSEES I.E. SHRI NUKALA RAMAKARISHNAS LEVEL OF OPERATION IS HIGH VIS-- VIS THE INSTANT ASSESSEE. THERE CANNOT BE ANY DISP UTE THAT THE SELLING RATE OF FISHES WOULD DEPEND UPON THE VARIETY OF FISHES R EARED AND ALSO THE AREA WHERE THEY ARE MARKETED. IN THE INSTANT CASE THE SAID DETAILS WERE NOT BROUGHT ON RECORD. THE CONTENTION OF THE ASSESSEE I N GROUND NO.3 IS EXACTLY ON THIS POINT AND WE FIND MERIT IN THE CONT ENTION OF THE ASSESSEE HEREIN ON THIS POINT FOR THE REASONS STATED BEFORE. HENCE IN OUR VIEW THE LEARNED CIT(A) IS NOT CORRECT IN DIRECTING THE ASSE SSING OFFICER TO FOLLOW THE PARAMETERS FIXED IN THE CASE OF SHRI NUKALA RAMAKRI SHNA. 7. WE HAVE ALREADY STATED THAT THE ASSESSING OF FICER HAS ESTIMATED THE INCOME FROM FISH BUSINESS IN TWO STAGES IN THE INST ANT CASES ALSO. WE HAVE ALREADY UPHELD THE VIEW OF LEARNED CIT(A) THAT THE INCOME HAS TO BE ESTIMATED ONLY AT THE POINT OF ACTUAL SALES. HENCE THE INCOME FROM FISH BUSINESS ESTIMATED BY THE ASSESSING OFFICER ALSO RE QUIRES RECONSIDERATION. ACCORDINGLY WE ARE OF THE VIEW THAT THE INCOME OF THE ASSESSEE HEREIN FROM FISH BUSINESS HAS TO BE ESTIMATED INDEPENDENTL Y BY DULY CONSIDERING THE VARIOUS FACTORS SURROUNDING HIS CASE. ACCORDIN GLY WE SET ASIDE THE IMPUGNED ORDERS OF LEARNED CIT(A) AND DIRECT THE AS SESSING OFFICER TO WORK OUT THE INCOME FROM OWN FISH TANKS AFTER AFFOR DING NECESSARY OPPORTUNITY OF BEING HEARD. ITA NOS 67 TO 72 & 136 TO 141 OF 2011 MOTURI KANAKE SWARA RAO ELURU PAGE 9 OF 9 8. SINCE WE HAVE SET ASIDE THE ORDERS OF LEAR NED CIT(A) AND RESTORED THE ISSUE OF ESTIMATING THE INCOME FROM FISH BUSINE SS TO THE FILE OF THE ASSESSING OFFICER THERE IS NO NECESSITY TO SEPARAT ELY DEAL WITH THE APPEALS FILED BY THE REVENUE. 10. IN THE RESULT THE APPEALS OF THE ASSESSEE AS WE LL AS THE APPEALS OF THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2011. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM DATE:28-09-2011 COPY TO 1 THE DY.COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 VISAKHAPATNAM 2 SHRI MOTURI KANAKESWARA RAO 4-15-9 NEAR BALAJI T HEATRE RICE MILL STREET ELURU WEST GODAVARI DISTT. 3 4. THE CIT CENTRAL HYDERABAD THE CIT(A)-I HYDERABAD 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM